Annual Report 2007-08 - Kingfisher Airlines

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Schedules forming part of accounts for the nine months ended March 31, 2008 (Contd.)20. Leases and Hire Purchase (Contd.)• The Company does not have an option to buy the aircraft or helicopters and spare engines or to renew the leases.• In case of default by the Company, in addition to repossession of the aircraft, penalties are stipulated in the agreements.• The Company is required to deposit a commitment fee and a security deposit with the lessor or provide a letter of credit forsuch amounts.• Operating lease agreements for office & residential premises are mainly for a non cancelable period of three years. The leasedpremises can be renewed at terms mutually agreeable to the Company and the lessor.ParticularsLease and maintenance contributions for the period/yearMinimum Lease Payments and maintenance contributions:- Not later than one year- Later than one year but not later than five years- Later than five yearsNine MonthsendedMarch 31, 2008(Rs)4,296,865,1975,005,020,37314,804,893,9806,054,677,852Twelve monthsendedJune 30, 2007(Rs)4,059,020,3294,603,511,18915,065,145,7363,436,391,847In addition to the above, the Company has entered into agreements to lease aircrafts/engines in respect of which theaircrafts/engines are pending delivery/the lease is yet to commence as at March 31, 2008. The above table ofminimum lease payments does not include amounts that may become payable in respect of leases yet to commence as atMarch 31, 2008.Finance leasesFinance lease arrangements relate to ground handling and related equipments. The lease period is for three years with interestrates ranging from 10.5% to 12% per annum and the Company has an option to renew the lease at the end of the initial leaseterm. The Company pays fixed lease rentals over the period of the lease whereby the net present value of the minimum leasepayments amount substantially to the cost of the assets.ParticularsTotal minimum lease payments at the balance sheet date in case of balance fixednon cancelable lease term.Less : amount representing finance chargesPresent value of minimum lease payments (Rate of interest 11% p.a.)Nine monthsendedMarch 31, 2008(Rs.)13,224,748773,41912,451,329Twelve monthsendedJune 30, 2007(Rs)24,600,8682,192,72522,408,143Lease payments for the period/year 11,376,164 20,033,312Minimum Lease Payments :Not later than one year [Present Value Rs. 11,085,438as on March 31,2008(Previous Year Rs.13,297,664)]11,840,904 15,015,660Later than one year but not later than five years [Present Value Rs.1,365,891 as onMarch 31,2008 (Previous Year Rs. 9,110,479)] 1,383,844 9,585,20852
Schedules forming part of accounts for the nine months ended March 31, 2008 (Contd.)Hire purchase arrangementsDuring the period ended June 30, 2006, the Company entered into hire purchase agreements in respect of aircrafts. The salientfeatures of hire purchase agreements for aircrafts are as follows:• Term is for 10 years• Option to purchase the aircraft either during the term of the hire purchase arrangement on payment of the outstandingprincipal amount or at the end of the hire purchase term on payment of a nominal option price.• In the event of default, the Company is responsible for payment of all costs of the owner including the financing costs andother associated costs. Further a right of possession is available to the owner.• The Company is responsible for maintaining the aircraft as well as insuring the same.ParticularsTotal minimum hire purchase installments at the balance sheet date in case of balancefixed non- cancelable term.March 31, 2008(Rs)June 30, 2007(Rs)1,275,061,395 1,419,685,138Present value of minimum hire purchase installments 1,045,765,757 1,142,869,803Payments for the year /period 163,546,508 228,152,967Hire purchase payments:Not later than one year [Present value Rs. 104,782,068 as on March 31, 2008] (June30,2007 Rs. 103,068,176)]Later than 1 Year but not later than 5 years [Present value Rs. 472,942,105 as onMarch 31, 2008] (June 30, 2007 Rs. 465,206,316)]Later than 5 years [Present value Rs. 468,041,583 as on March 31, 2008](June 30, 2007 Rs574,595,311)Assets given on lease153,419,815 159,120,528614,182,513 625,982,190507,459,067 634,582,420The Company had given one helicopter to Deccan Aviation (Lanka) Private Limited under an operating leasearrangement. Lease rental income recognized in the Profit and Loss account amounts to Rs 1,943,778 (Previous year Rs.4,221,360).21. Segment disclosuresThe Company operates in a single business segment, i.e. of providing scheduled and unscheduled air transportation services.Further, the Company currently operates only in India and does not have operations outside India. Accordingly, no separatesegment disclosures for primary business segment and geographical disclosures are required to be given.22. Deferred taxesParticularsAs atMarch 31, 2008(Rs.)As atJune 30, 2007(Rs.)LiabilityOn account of depreciation on fixed assets 248,606,809 151,482,433On account of timing differences in recognition of expenditure 54,516,158 23,188,975Deferred tax liability 303,122,966 174,671,408AssetOn account of timing differences in recognition of expenditure 26,475,997 25,791,139On account of Unabsorbed losses and depreciation under the Income Tax Act, 5,261,644,353 148,880,2691961Deferred tax asset 5,288,120,350 174,671,408Net deferred tax asset 4,984,997,384 Nil53
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Annual Report 2007-08 - Kingfisher Airlines

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